Gigliotti v Gigliotti [2002] VSC 279

Supreme Court of Victoria|2002-07-19|Before: Byrne J

TESTATOR'S family maintenance - widow's claim - life interest in substitute home of her choice - "nest egg".

The plaintiff, Mafalda Gigliotti, married the deceased, Antonio Gigliotti, on 9 May 1990. Each of them had been widowed and had a grown up family of their earlier marriage. At the time of the marriage Mr Gigliotti was nearly 75 years of age and his wife nearly 65 years. Mrs Gigliotti is now aged 78 years. Mr Gigliotti died on 20 April 2000 leaving a will dated 29 January 2000. Mrs Gigliotti seeks further provision pursuant to Part IV of the .

The present value of the estate is relatively modest. According to the affidavit of the defendant executor, Giovanni Gigliotti, sworn 12 July 2002, the assets totalling $267,986 comprise the following:

[diamond] The family home at 40 Rodney Street, Merlynston valued at $260,000

Against this, the executor estimates that the estate has incurred or will incur costs of some $20,000 in defending this proceeding. For present purposes I assume that the plaintiff's costs would be about the same. For practical purposes this means, first, that the estate other than the Merlynston home is not sufficient to pay the costs and expenses of the executor in defending the proceeding. Accordingly, the home will have to be sold. Second, it means that, if the costs of all parties are to be paid out of the estate, the amount available is about $225,000.

The will of the deceased is not a document free of difficulty. The case before me was conducted on the basis that its effect was to give to Mrs Gigliotti a life interest in the Merlynston home with her being responsible for rates, taxes, gas and electricity. The estate is to insure and maintain the property. The household furniture and Mr Gigliotti's tools were also to be hers for her life. There is also a legacy of $5,000 to a grandson, Antonio Gigliotti. Upon the cessation of the life tenancy, the household furniture and tools pass to the three sons of the deceased in differing shares and the residue is to be distributed as to one quarter to Mrs Gigliotti or her estate; one quarter to a son, Giovanni Gigliotti; one quarter to another son, Pierino Gigliotti and his two children at 21 years; and the final quarter to two named charities. It is likely that the life interest terminates if Mrs Gigliotti should voluntarily cease living in the Merlynston home.

The present claim arises because Mrs Gigliotti wishes to live with her own family in Myrtleford or Wangaratta. She feels unhappy and unwelcome at Merlynston near her late husband's family.

In terms of the requirements of s. 91(3), it was put on behalf of Mrs Gigliotti that her proper maintenance and support requires me to have regard, not only to her material needs, but also to her reasonable social and domestic requirements. It was put that, as an elderly woman speaking little English, she might reasonably need to live her remaining years with her own kin rather than with her late husband's family, especially as there appears to exist some hostility between her and them. This proposition was not seriously challenged on behalf of the defendants so that attention then moved to the amount of provision which should be made for her.

Section 91(4) requires me to have regard to 12 matters in undertaking this task. I have done so and will not burden this judgment by dealing with each of them in turn. The relevant considerations as I see the position are the following: the age of Mrs Gigliotti; the fact that she has been a devoted wife for some 10 years and is now a widow with few assets and has as income only an age pension of $427 per fortnight; she is in good health for a woman of her age; the competing beneficiaries have not demonstrated any particular want of financial resources; their moral claim upon the bounty of the deceased is minimal compared with that of the widow. There was some evidence of lack of affection or want of filial devotion on the part of some of these competing beneficiaries. This was disputed and I make no finding adverse to them in this judgment, rather the contrary: their attitude as it appeared from the presentation of their case before me showed them to be sympathetic to the needs of their stepmother.

Two matters, however, of some novelty were raised and these have caused me to reserve this decision. The first was a submission put on behalf of the estate that Mrs Gigliotti had, by her statement that she did not want to live in the Merlynston home and by putting the estate to the expense of defending her claim with the consequence that the home will have to be sold, disclaimed her life interest. Accordingly, it was put, the gifts in remainder had vested in possession. I very much doubt that her conduct amounted to a disclaimer. In any event, I am not at all sure that I understand what is the consequence of such a disclaimer for the purposes of my present task. I therefore put this matter to one side.

Of greater difficulty is the fact that on 7 May 1990, two days before their marriage and expressly in contemplation of the marriage, Mr and Mrs Gigliotti executed what is described as an pre-nuptial agreement. The agreement is in the following terms:

" PRENUPTIAL AGREEMENT THIS AGREEMENT is made on the 7th day of May 1990. This Agreement is entered into BETWEEN ANTONIO GIGLIOTTI widower of 40 Rodney Avenue, Merlynston in the State of Victoria (hereinafter called `Tony') and MAFALDA CASAROTTO (known as Lena) widow of Gavan Street, Bright in the State of Victoria (hereinafter called `Lena'). Tony and Lena have agreed to be married on the 9th day of May 1990. Both of them are entering into the marriage with love for each other and with hope for the future. In the hope of leaving to marital tranquillity in life together and to avoid or reduce any dispute between them in the future about the ownership, use, and with descent of property and to avoid unpleasantness and dispute should, despite their best intentions, the marriage in any circumstances not work out, they wish to set down in writing before their marriage what they are agreeing to as to how their financial relationship with each other following the marriage should be regulated. 1. Tony owns his home at 40 Rodney Avenue, Merlynston. The home is worth approximately $160,000.00. There is no Mortgage on that home. Tony is made to feel anxious by the possibility that upon a re-marriage The Family Law Act 1975 might give Lena some right to that piece of property. Lena does not desire now, or ever, to make any claim to it and desires to set Tony's mind at rest. As to the house Tony and Lena are agreed that Lena will never make any claim against that particular piece of property and Tony will continue to provide it as a home for their married future together. Tony will pay the municipal and Melbourne Metropolitan Board of Works rates and insurance on the property. 2. Apart from the home at Rodney Avenue, Merlynston Tony owns all the house furniture situated in the home and bank accounts totalling $12,000.00. There is no other property owned by Tony. Lena owns a Ford Laser motor vehicle 1986 model valued at approximately $9,000.00 and has bank accounts totalling some $7,500.00. Tony and Lena agree that these separate properties will remain separate throughout the marriage although each will permit the other to use what they have except for the monies in the bank accounts. 3. Tony now promises that during the marriage the house and household furniture will be available for use by Lena. Both Tony and Lena are on pensions and they both intend to support each other from their respective pension receipts. 4. Tony hopes in the future to improve the home at 40 Rodney Avenue, Merlynston and he may in the future sell that home and purchase some other accommodation for himself and Lena. Tony acknowledges that any expenses on such improvements will be entirely his responsibility and if Lena makes any contribution with Tony's agreement to any improvements or the purchase of any new property, then Tony acknowledges that he will have an obligation to repay that amount to Lena and it will be treated between them as a debt. 5. Tony promises that should he die prior to Lena that Lena will have the use and occupation of the said house and household furniture during her widowhood. 6. Tony has spoken to his lawyers about the preparation of this Agreement and he desires that Lena should also have advice before signing it since it is the desire of both of them that this Agreement should be a means of minimising any possible friction between them and not a source of additional friction between them. 7. This Agreement is intended to be binding upon the heirs, executors or trustees of Tony's and Lena's estates. 8. This Agreement shall become effective upon Tony and Lena going through an effective ceremony of marriage, whether on the 9th day of May 1990 as presently planned or some other date. If, unexpectedly the marriage should not occur within one year, this contract shall terminate unless they expressly agree in writing to revive it. "

On the same day Mr Gigliotti made a will in contemplation of the imminent marriage in which he left the Merlynston home to his intended wife during widowhood, she to maintain the property and to pay outgoings. There was a gift over to his four children equally.

Each of these documents was prepared by Mr Gigliotti's Myrtleford solicitors and Mrs Gigliotti's execution of the agreement appears to have been witnessed by a law clerk in that office. Mrs Gigliotti acknowledged that the signature was hers but said she had no recollection that anyone read or translated or explained the document to her and no recollection of the circumstances of its execution. Having observed her giving this evidence and notwithstanding the lack of evidence to the contrary, I find that she executed the document at the office of the solicitors and that it had been translated to her at the time.

The legal effect of the pre-nuptial agreement is problematic. It appears to be an attempt to prevent her making a claim to the Merlynston home pursuant to the Family Law Act. Mr Gigliotti agrees to make the home and any substitute home available for her and that after his death she might continue to enjoy the house and its contents during her widowhood. This was given effect to in the will of this same date. Otherwise, the spouses were to maintain separate property. Such a "maintenance agreement" without court approval or registration is not binding pursuant to the then provisions of Part VIII of the Family Law Act. It is probably ineffective at law as being contrary to public policy.

Nevertheless, I do not think I should ignore the fact that, upon their marriage, this couple established what seemed to them was a sensible and serious property regime. Doubtless, Mr Gigliotti was sensitive that he should not, by marrying Mrs Gigliotti, jeopardise the expectation of his children that they would in due course receive the fruits of his lifetime endeavours. This is a matter I will have regard to in determining the amount of provision[1]. In the circumstances which now exist, I consider that I should, so far as is consistent with the proper provision for Mrs Gigliotti, respect the intention of the married couple in 1990 and his intention in his 1990 will and his 2000 will that his family should in the fullness of time receive his estate.

I give effect to this by rejecting the submission put on behalf of the widow that she should have a fee simple title to a house in Myrtleford which will be bought for her out of the estate. I will direct that she have a life interest only in the house with the remainder in effect passing in accordance with the gift over provision in the will. The wisdom of generations of judges exercising this jurisdiction has dictated that a widow requires not only a roof over her head, but also what is called a "nest egg" to give her some comfort in facing the unforeseeable vicissitudes which lie ahead. I will, therefore, make provision that she have such a sum for her own use and for her to pay the outgoings and to maintain the house to be bought for her. Having regard to the evidence of the likely cost of a suitable house and to include provision for the cost of purchase and relocation which she must bear, I will direct that $150,000 be made available for the purchase. I will fix $50,000 as the amount of her nest egg.

1. Declare that the distribution of the estate of Antonio Gigliotti effected by his will dated 27 January 2000 does not make adequate provision for the proper maintenance and support of the plaintiff, Mafalda Gigliotti, his widow.

2. Order that the provision for the plaintiff be made out of the estate of the deceased by distributing the estate as if the following amendments had been made to the will:

(i) by deleting cll. 5, 6 and 7 and substituting the following cll. 5 and 6:

"5. I give and devise and bequeath to my wife, Mafalda Gigliotti (also known as Lena Gigliotti), a life interest in my real property situate at and known as 40 Rodney Avenue, Merlynston in the State of Victoria and my household furniture and tools, she being responsible for payment of rates, gas and electricity charges and any taxes levied on the said property and for its insurance and for its maintenance in the same state of repair as at my death. 6. Should my wife, Mafalda Gigliotti, desire not to continue to live in my said property I direct my executor to sell the property. From the proceeds of sale my executor shall: (a) Set aside $150,000 to purchase a house to be chosen by my wife in Myrtleford or such other place as she chooses. This sum is to cover the cost of the purchase and the legal costs and stamp duty payable in respect of the purchase. This house is to be held by my wife as a life interest upon the terms set forth in cl. 5 hereof. (b) Pay to my wife absolutely the sum of $50,000 without legacy interest.

(ii) By deleting cl. 11(a) and substituting for the word "quarter" where appearing in sub-cll. (b), (c) and (d) of cl. 11 the word "third".

3. Order that the costs of the plaintiff of this application be taxed on a solicitor and client basis and when taxed be paid out of the proceeds of sale of the Merlynston property.

4. Order that the executor's costs and expenses of and incident to this application be had and retained out of the estate.

5. Liberty to apply.

I will hear counsel further upon the precise terms of the orders to be made to give effect to these conclusions.

At a glance

Court

Decision date

Before

Source

Judgment (25 paragraphs)

Parties

Legislation Cited (1)